UK insurance titan Aviva has signed a memorandum of understanding with Akisgorta and Akbank to establish a life and pensions business in Turkey, in addition to entering into a bancassurance agreement with Akbank.

Under the proposed transaction, Aviva’s Turkish life and pensions business, Aviva Hayat ve Emeklik (Aviva HE), will be merged with Akisgorta’s life and pensions unit, Ak Emeklilik (Ak E).

As part of the deal, Aviva and Aksigorta will hold equal shareholdings in, and will jointly manage, the new company, which would benefit from a long-term and exclusive agreement to offer life insurance and pension products to Akbank’s 5.9 million retail customers through its 687 branches.

If the transaction goes ahead, the new company will hold a number one position in pensions and a number two position in life insurance, according to Aviva.

The companies have entered into exclusive discussions in the anticipation of announcing the signing of definitive documentation later this year. The transaction will also be subject to appropriate regulatory approval.